Berkeley staff outline FY2027–28 budget with nearly $30M structural gap; council told cuts and layoffs likely

City staff presented a proposed FY2027–28 biennial budget on May 19 that frames a multiyear fiscal gap the city has been managing for years and lays out a plan to close most of the shortfall through a mix of one‑time reserves, revenue adjustments, fee increases and workforce reductions.

The proposed plan uses about $12.05 million in one‑time resources and assumes a November sales-and-use tax measure will pass to sustain some service levels. “We are experiencing a structural deficit,” Budget Manager Maricar Dupaya told the council, summarizing a decade of expenses growing faster than revenues and the city’s earlier reliance on one‑time fixes such as ARPA and property transfer taxes.

Deputy City Manager David White said the city’s initial general fund deficit estimates were about $32 million for fiscal 2027 and that a combination of revenue updates and proposed reductions narrows that gap to roughly $29.3 million in 2027 and $29.5 million in 2028 before any voter action. White outlined department‑level impacts and said staff prioritized preserving core services while proposing nearly 150 full‑time equivalent reductions overall, including using one‑time funds to bridge about 33 positions to fiscal 2027 if the sales tax passes.

The plan proposes significant cuts by department. For police, staff would use one‑time funds to preserve 15 officers and six dispatchers while still expecting net reductions; for the fire department, the staff report identified a proposed closure of Fire Station 4 that would remove nine positions but said one‑time funding could keep the station open pending the tax measure. Health, Housing & Community Services faces deep reductions and proposed elimination or transfer of several programs, including the mobile crisis team and a substantial rightsizing of the mental‑health division.

Unions and service providers urged the council to find alternatives to layoffs. Justin Pitcher, president of Public Employees Union Local 1 (AFSCME), said the cuts would eliminate 20 positions in his unit alone and warned that program reductions would have “immediate impact on the services we provide across the city.” Several nonprofit and community speakers asked the council to preserve funding for small‑sites affordable housing, warming and inclement‑weather shelters, mobile crisis and food security programs.

Councilmembers identified priorities they want to protect as the budget moves through the committee process: retaining public‑safety capacity (especially Station 4 and dispatch staffing), keeping the street trauma prevention program, and protecting homelessness services and small‑sites funding. Several members also highlighted economic development staff positions that generate revenue as priorities to retain.

Staff will present further analysis at Budget & Finance and return the proposal for adoption in June; the city manager said the council is expected to consider the measure and final adjustments before a planned June 23 adoption. If the sales‑and‑use tax fails in November, staff warned, deeper reductions would be required in the FY2028 update.

The public hearing on the budget closed later in the meeting after extended public testimony and council discussion; next steps include further Budget & Finance Committee review, a June 9 council check‑in on the Capital Improvement Program, and additional hearings leading toward final adoption.